Japan's economy slips back into deflation

Tokyo

JAPAN'S economy slid back into mild deflation last month as core consumer prices suffered their first drop in more than two years, prompting market speculation that the Bank of Japan (BOJ) could be forced to administer further monetary shock treatment soon to the world's third-largest economy.

The revelation on Friday that core consumer prices, including oil but excluding fresh food, fell by 0.1 per cent in August compared with its level a year earlier came as other signs of weakness suggest that Japan risks slipping back into recession this year.